Top 10 Worst Credit Card Practices
We all know that credit card companies can be pretty sneaky with the fees and their practices have been attracting the attention of Congress lately. But, of the things they do, what are the worst?
Here’s a look at the top 10 worst credit card practices.
10.) Customer Service
Sometimes we get decent service, but more often than not we get the run around, left on hold for over 10 minutes, and bounced around from department to department until FINALLY we reach someone who may be able to help us. This is usually followed by the discovery that the person can’t, in fact, help us so we do some more bouncing around. Ok, maybe not every transaction is like that, but it happens often enough to make the list.
9.) Pre-approval Scheme
This doesn’t mean you’re approved, and worse, if you don’t meet their qualifications they could send you a ‘replacement card.’ Make sure you read the fine print to determine what you’re getting with this so-called replacement card.
8.) Balance Transfer Fees
Credit card companies make balance transfers sound like such a wonderful deal – and on occasion you may be able to find one – but the truth is, most of the time you may be better off just leaving your money where it is as opposed to transferring it with a transaction fee of 3-5%.
7.) Confusing Terms and Conditions
If you’ve ever read the gobblygook of a credit card application and felt that you needed a lawyer to interpret it, rest assured you’re not alone. Credit card companies have been making them more and more complicated for years as a way to hide the true cost of credit. Hey, it makes them more money if you don’t understand what you’re getting into.
6.) Ridiculously High Interest Rates
For those who don’t happen to fall into the crème de la crème of borrowers, you may have noticed the exorbitant rates they’ve been offering, especially as of late. Oh sure, they’ll offer you a sweet deal to get your business, but once they’ve got what they want, they don’t really care much afterwards. When the promo rate expires, be sure you know what the new rate is going to be.
5.) Rate Raises
If you read the fine print, it tells you that your credit card company has the authority to raise your rates for any reason – even no reason. There’s not much you can do about it either, except take your business elsewhere. Depending on the type of customer you are you may get a little of what you want now, but it doesn’t guarantee that it won’t happen again in the future.
4.) Over the Limit
Do you remember the days when credit card transactions that would take you over the limit would be denied? Unfortunately, since the credit card company figured out they could make a bunch of money off this, they established a little leeway on their networks – meaning you can go over your limit and they can charge the heck out of you.
3.) The Late Policy
This is the big cash cow for the credit card industry. As such, they send the bill out as close to the due date as possible. Not only that, but they also tack on a TIME when the card is due by. Be very careful and make sure that you read the fine print to determine if there’s a time on your due date. If there’s a deadline of 1 pm EST and you make the payment at 3 pm EST, you’re late and you’re going to get a fee.
2.) Universal Clause
Were you a few days late on that electric bill? Forget the water bill this month until you got the second notice? What about your car payment, are you up-to-date? Well, if you’re not and your credit card company has a universal clause, it could mean that your interest rate will skyrocket because of a default on your OTHER obligations. Bye-bye 0% interest, hello 30% interest.
1.) Double Cycle Billing
And the number one worst practice of credit card companies is the double billing. This is the practice of charging you interest on debt you’ve already paid off. Basically, they average the daily balance out for two billing cycles and then charge you accordingly, even if you pay off the balance in the first billing cycle. It’s definitely not your friend!
What other deceitful practices can you think of?
